What are the conditions for imposing countervailing duty in Vietnam?

What is the definition of countervailing duty in Vietnam?

Under Clause 6, Article 4 of the Law on Export and Import Duties 2016, a countervailing duty means an additional import duty imposed upon subsidized goods imported into Vietnam that causes or threatens to cause considerable damage to domestic manufacturing or prevents the formation of domestic manufacturing.

What are the conditions for imposing countervailing duty in Vietnam?

According to Clause 1, Article 13 of the Law on Export and Import Duties 2016, the conditions for imposing countervailing duty in Vietnam are as follows:

- It is determined that imports are subsidized as prescribed by law;

- The imports cause or threaten to cause considerable damage to domestic manufacturing or prevent the formation of domestic manufacturing.

What are the conditions for imposing countervailing duty in Vietnam? (Image from the Internet)

What are the rules and period for imposing countervailing duty in Vietnam?

According to Clauses 2 and 3, Article 13 of the Law on Export and Import Duties 2016, the rules and period for imposing countervailing duty in Vietnam are as follows:

- Rules for imposing countervailing duties:

+ Countervailing duties may only be applied to a reasonable extent to prevent or minimize damage to domestic manufacturing;

+ The countervailing duties shall be applied after an investigation is carried out and conform to the investigation conclusion as prescribed by law;

+ Countervailing duties shall be imposed upon subsidized imports in Vietnam;

+ The imposition of countervailing duties must not cause damage to domestic socio-economic interest.

- Countervailing duties shall be applied for a period not exceeding 5 years from the day on which the decision to apply anti-dumping duty takes effect. Such decision may be extended where necessary.

Which authority has the power to impose countervailing duty in Vietnam?

According to Clause 3, Article 15 of the Law on Export and Import Duties 2016, the regulations are as follows:

Application of anti-dumping duties, countervailing duties, safeguard duties

1. The application, adjustment, removal of anti-dumping duties, countervailing duties, safeguard duties shall comply with this Law, regulations of law on anti-dumping, anti-subsidy, and safeguard measures.

2. In consideration of duty rates, quantity, or value of goods subject to anti-dumping duties, countervailing duties, or safeguard duties, the declarant shall declare and pay duties in accordance with regulations of law on tax administration.

3. The Ministry of Industry and Trade shall decide the application of anti-dumping duties, countervailing duties, safeguard duties.

4. The Ministry of Finance shall provide for the declaration, collection, payment, and refund of anti-dumping duties, countervailing duties and safeguard duties.

5. Where the interests of Socialist Republic of Vietnam are infringed or violated, pursuant to international treaties, the Government shall propose to the National Assembly other appropriate safeguard duty measures.

Thus, the Ministry of Industry and Trade is responsible for applying the countervailing duty.

What are the cases where countervailing duty will not be imposed in Vietnam?

According to Clause 2, Article 86 of the Law on Foreign Trade Management 2017, the conditions for the imposition of countervailing measures are stipulated as follows:

Conditions for the imposition of countervailing measures

1. A countervailing measure will be imposed on imports if all following conditions are satisfied:

a) Products are subsidized as prescribed in Articles 84 and 85 of this Law and the rate of subsidy is specific, except for the cases prescribed in Clause 2 of this Article;

b) There is material injury or threat of material injury to the domestic industry or the material retardation of establishment of the domestic industry;

c) There is the existence of a causal link between the import of subsidized products prescribed in Point a of this Clause and the injury to the domestic industry prescribed in Point b of this Clause.

2. The countervailing measure shall not imposed on producers or exporters of a developed country whose rate of subsidization is not more than 1% of the price of products exported to Vietnam, producers or exporters of a developing country whose rate of subsidization is not more than 2% of the export price and producers or exporter of a less-developed country whose rate of subsidization is not more than 3% of the export price.

3. If the production of imports originating in a developing country accounts for not more than 4% of total imports of like products to Vietnam and the total production of imports originating in developing countries and satisfying the abovementioned conditions accounts for not more than 9% of the total imports of like products to Vietnam, these countries will be exempt from the countervailing measures.

Countervailing duty is also a countervailing measure. Therefore, the countervailing duty shall not imposed on producers or exporters of a developed country whose rate of subsidization is not more than 1% of the price of products exported to Vietnam, producers or exporters of a developing country whose rate of subsidization is not more than 2% of the export price and producers or exporter of a less-developed country whose rate of subsidization is not more than 3% of the export price.